WASHINGTON, D.C. – President Donald Trump has escalated his trade offensive with new 25% tariffs on imported cars and auto parts, a move set to disrupt global supply chains, inflate vehicle prices, and strain U.S. relations with key allies.
The tariffs, effective April 2 for vehicles and May for parts, target a $240 billion import market that accounts for nearly half of U.S. car sales.
Trump framed the measure as a boon for American manufacturing, declaring it would spur “tremendous growth” and jobs.
But industry analysts warn of production delays, higher consumer costs, and retaliatory measures from trading partners.
Mexico, the top foreign supplier of U.S. vehicles, faces immediate disruption, along with South Korea, Japan, Canada, and Germany—all major players in the auto trade.
While Canada and Mexico get a temporary reprieve on parts tariffs, the long-term impact could upend the tightly integrated North American supply chain.
Shares in General Motors and Ford dropped sharply after the announcement, while Toyota, Nissan, and Honda tumbled in Tokyo trading.
Allied governments reacted with alarm. Canadian Prime Minister Mark Carney called the tariffs a “direct attack” on his country’s auto sector, while Japan’s government vowed to explore countermeasures.
The European Commission’s Ursula von der Leyen criticized the move as “bad for businesses, worse for consumers,” signaling potential retaliation.
The U.K., which sold over 116,000 Jaguar Land Rover vehicles to the U.S. last year, is racing to negotiate exemptions before the tariffs take effect.
“This couldn’t come at a worse time,” said Mike Hawes of Britain’s auto trade group, urging a swift deal.
The tariffs risk adding 4,000–4,000–10,000 to vehicle prices, per Anderson Economic Group estimates, with U.S. assembly lines vulnerable to parts shortages.
Even Hyundai’s recent $21 billion U.S. investment—touted by Trump as proof tariffs “work”—may not offset the broader fallout.
United Auto Workers leader Shawn Fain, a Trump critic, surprisingly backed the move, calling it a strike against “decades of free trade disaster.”
But with automakers already reeling from steel and aluminum tariffs, the sector braces for deeper turbulence.
